Tax in the case of block assessment of search cases

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

1. Principal Commissioner of Income Tax vs Gahoi Foods Pvt. LTD

   Supreme Court of India 24 Apr 2023 Binding (SC) Reportable (2023) 4 SCC 1501

   Court's Decision & Legal Precedent

   In a case where a search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961 has been conducted, the Assessing Officer assumes jurisdiction to assess or reassess the total income under Section 153A only for: (a) all pending assessments/reassessments which shall stand abated and be assessed afresh as a unified assessment for the six preceding assessment years; and (b) completed/unabated assessments, only if and to the extent incriminating material relating to those assessment years is found or unearthed during the search or requisition. In the absence of incriminating material being found during search in respect of any completed/unabated assessment within the six-year block period, the Assessing Officer cannot assess or reassess the total income taking into consideration other material available on record, but the completed assessments remain binding, subject to the Revenue's preserved right to initiate reassessment proceedings under Sections 147/148 of the Act, subject to fulfilment of the statutory conditions specified therein.

   On this section: Special tax rate for undisclosed income (60%) under erstwhile block assessment regime

   Read the full order on eCourts India

2. Pr. Commissioner of Income Tax vs Gahoi Food Pvt. LTD

   Supreme Court of India 24 Apr 2023 Binding (Supreme Court) Reportable

   Court's Decision & Legal Precedent

   In case of search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961, the Assessing Officer assumes jurisdiction for block assessment under Section 153A for six assessment years. While all pending assessments/reassessments for those years stand abated and can be reassessed for total income including all available material, in respect of completed/unabated assessments, the Assessing Officer can make an addition or reassessment only if incriminating material related to that issue has been found and unearthed during the search. In the absence of any incriminating material being unearthed during the search, the Assessing Officer cannot assess or reassess taking into consideration other material in respect of completed/unabated assessments. However, the completed/unabated assessments can be reopened by the Assessing Officer in exercise of powers under Sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged under those sections.

   On this section: Special rate of tax (60%) for undisclosed income under the old regime (Section 158BA)

   Read the full order on eCourts India

3. Dayawanti through Smt. Sunita Gupta (legal Heir) vs Commissioner of Income Tax

   Supreme Court of India 24 Apr 2023 Binding (SC) Reportable

   Court's Decision & Legal Precedent

   In case of search under Section 132 or requisition under Section 132A of the Income Tax Act, 1961: (i) All pending assessments/reassessments shall abate and merge into assessment under Section 153A, permitting Assessing Officer to assess 'total income' for the entire six assessment years; (ii) In respect of abated/pending assessments, the AO can assess total income incorporating both disclosed income and undisclosed income found during search or available from other sources; (iii) However, in respect of completed/unabated assessments where no assessment was pending at the date of search initiation, the AO can only assess or reassess by reopening such assessment when incriminating material is found relating to that specific assessment year; (iv) Where no incriminating material whatsoever is found during the search for a particular assessment year, the AO cannot assess or reassess a completed assessment for that year under Section 153A, and the completed assessment remains final and protected; (v) In such cases, the Revenue's only remedy is to resort to reassessment under Sections 147/148, subject to fulfillment of the conditions stated therein, and these powers are expressly saved; (vi) The assessment under Section 153A is fundamentally linked to the search or requisition under Sections 132/132A, and its object is to bring to tax undisclosed income detected through such search - foundation for Section 153A assessment is the existence of incriminating material.

   On this section: Special rate of tax (60%) for undisclosed income found during search in erstwhile regime under Chapter XIV-B

   Read the full order on eCourts India

4. Pr Commissioner of Income Tax (c) 1 vs Rehab Housing PVT LTD through Its Md

   Supreme Court of India 24 Apr 2023 Binding (Supreme Court) Reportable (2023) SCC OnLine 735 (Provisional Citation)

   Court's Decision & Legal Precedent

   In Case Of Search Under Section 132 Or Requisition Under Section 132A, The Assessing Officer Assumes Jurisdiction For Block Assessment Under Section 153A For Six Assessment Years. While All Pending Assessments/Reassessments Shall Stand Abated, In Case Of Completed/Unabated Assessments, The Assessing Officer Can Only Assess Or Reassess The Total Income Taking Into Consideration Incriminating Material Unearthed During The Search And Other Material Available. In Case No Incriminating Material Is Unearthed During The Search, The Assessing Officer Cannot Assess Or Reassess Taking Into Consideration Other Material In Respect Of Completed/Unabated Assessments. The Assessment Under Section 153A Is Inextricably Linked With The Search And Requisition Under Sections 132 And 132A, And The Object Is To Bring Under Tax The Undisclosed Income Which Is Found During The Course Of Search Or Pursuant To Search Or Requisition. Only In Cases Where Undisclosed Income Is Found Based On Incriminating Material, The Assessing Officer Assumes Jurisdiction To Assess Or Reassess Total Income For The Entire Six-Year Block Assessment Period Even In Case Of Completed/Unabated Assessments.

   On this section: Historical Provision Under Erstwhile Regime That Taxed Undisclosed Income At 60% Special Rate; Explains Why Earlier Regime Had Separate Block Assessment

   Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.